The Essence of WOW! and its impact on Profit

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The older, accepted wisdom of marketing – and the theory that you will find in many marketing textbooks – is that you need to “feed your funnel”. That is the process of constantly finding and feeding the top of your very wide funnel with new prospects that you look to convert into customers (here the funnel narrows) and, providing you deliver more than a half decent service, you will expect to keep a few of them as a source of regular, repeat business (this is where the funnel narrows to a very sharp point).

This process does work, but for the smaller business it can be very time consuming and, without robust processes and systems, incredibly difficult to manage. However, the business world is changing – and in a great way for the smaller business. We are into The Essence of WOW!

We now live in a review-before-purchase culture  with customers who want to feel engaged and part of the process.

In a recent survey (1) 51% of those who responded said that they purchased a product based on an online recommendation.

Who is closer to their customer base than the small business owner? Who will find it easier to engage with their customer base than the small business owner? Who should be taking that marketing funnel and turning it on its head by ensuring that the widest point is keeping and nurturing their customer base to encourage regular, repeat business? Simple – the smaller business owner.

This is The Essence of WOW!

In his book Flip the Funnel: How to Use Existing Customers to Find New Ones, Joe Jaffe writes about the need for businesses to focus their resources on engaging their current customers as a very cost effective way of encouraging repeat business and as a method of finding more customers. In this book, Jaffe coined the phrase “retention is the new acquisition”.

So, why is retention of current customers so important? Well, there are a number of very good, bottom-line reasons:

1. It costs six or seven times more to acquire a new customer than it does to retain an existing one

2. The average spend on re-purchase by existing customers is 67% higher than the initial purchase

3. After 10 purchases your customer has already referred you and your services to at least 7 other people

How does The Essence of WOW! work?

What makes this ideal for the smaller business, as I have said previously, is the proximity of the smaller business to their customer base. However, what makes it easier and amplifies the message is the use of online engagement and social media.

The cycle that starts with great customer service (the WOW! experience):

  • Ensure you are close to your customers
  • Know how to make your customers happy
  • Be as responsive to your customers as possible
  • Ensure your customers receive a very personalised experience

This is followed by a series of interactions that entice these customers to stay in touch:

  • Regular communications – thank-you cards, newsletters, emails, “I saw this and I thought of you”
  • Stay ‘front of mind’ of your customers
  • Provide them with information that they will find interesting and informative

Next include a series of engagement activities:

  • Offers
  • Discussions
  • Surveys / Polls
  • Events
  • Promotions

The list is endless, but use whatever works for your business. One really important thing to bear in mind is to make sure you measure what you are doing and do more of what is successful.

The outcome of this WOW! cycle is to encourage your customers to come back for more. To be so blown away by your service that they become your advocates and champions. They review you, they share your social media output, they take part in your discussions and they refer you to their connections and their circles.

The outcome? Even more customers and a more profitable small business.

What are your tips for providing WOW! moments for your customers? Share them in the comments box below.

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 References:

  1. Deloitte State of the Media Democracy Methodology: Online survey of 9,067 people in the U.S., Germany, the UK, Brazil, Japan, December 2009
  2. Flip the Funnel: How to Use Existing Customers to Find New One, Joseph Jaffe, 2010, John Wiley & Sons
  3. Flowtown, 2010: http://www.flowtown.com/blog/the-value-of-an-existing-customer
  4. Bain and Company, 2002
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